Ross Rides Into Town Retailer Opens 4 Stores In Orlando

August 11, 1985|By Selwyn Crawford of The Sentinel Staff

Three years ago this month, a group of private investors paid $3 million for six small department stores in California. Since then, Ross Stores Inc. has grown into a chain of 91 stores and is about to become a public corporation with outlets coast to coast.

Ross, which made a name for itself out West in the competitive off-price apparel business, makes its East Coast debut today in Orlando when it opens four outlets in what had been JByrons department stores.

Ross president and chief executive officer Don E. Rowlett, 54, said in a telephone interview last week that Ross Stores, based in Newark, Calif., has been able to expand rapidly, even as overall growth in the off-price apparel business cools off, because customers have embraced its approach just as quickly.

He said the move into Florida is evidence that Ross -- despite a loss of $4.3 million in the fiscal quarter ended May 4 -- is becoming even more popular.

''We give service, but we give it where it will do the most good -- when the customer has made her selection and is preparing to leave,'' Rowlett said. For instance, the company has a policy of opening another checkout station whenever more than three customers are waiting in one line.

''They have responded very well to what we have done,'' Rowlett said. ''There's no way we could have grown this fast unless the customers approved of us.''

Ross is expanding into Florida in an unusual way. In April, Clearwater- based Jack Eckerd Corp., which owned the 55-store JByrons chain, purchased a 12 percent interest in Ross Stores Inc.

Eckerd later sold all but five of its JByrons outlets to Amcena Corp. of New York, keeping four in the Orlando area and one in Tallahassee.

Ross has moved into Eckerd's four Central Florida stores; later this year it will take over the Tallahassee outlet as well. The Ross name will hang outside, Ross policies will be followed inside, and Ross buyers will select the clothing. But Eckerd still owns the stores, and profits will be divided evenly between Eckerd and Ross.

''We think it's a good relationship,'' Rowlett said of the deal with Eckerd. ''They had some excellent properties. We just wanted to get acquainted with them and the sites that they have'' in Florida.

Rowlett said Ross plans to open another store, probably in Sanford, after the Tallahassee outlet begins business. After that, he said, company officials will monitor the stores' progress before deciding on their next move.

If its track record holds true, Ross will move quickly to expand in Florida. Since August 1982, it has grown from six stores Since August 1982, it has grown from six stores in California to 91 outlets in six Western states and in Florida.

Rowlett said the company has a four-pronged approach to doing business:

-- Variety and volume of merchandise at each Ross store.

-- Brand-name merchandise exclusively -- no

house or private labels.

-- Low prices, discounted as much as 60 percent below those in regular department stores.

-- ''Hassle-free service'' that leaves customers to themselves while they shop but speeds them on their way at the checkout counter by accepting their major credit cards or out-of-town checks.

The key to success for all but the most elite retailers, however, is price. Price has propelled Ross Stores during its brief history, and price is what Rowlett is counting on to bring him continued success.

Rowlett, who owns about 5 percent of Ross Stores Inc., has been in the retail business for 30 years. He was responsible for launching F.W. Woolworth Co.'s J. Brannam division, a chain of discount apparel stores.

He became president of Ross after his venture company, U.S. Venture Partners, bought the first six stores with other private investors. The head of U.S. Venture Partners, Stuart Moldaw, is chairman of Ross' board of directors.

Rowlett said he knows what consumers want and thinks Ross has provided it. ''All we've said is that we can conduct our business in a lower cost method to where we can pass that on to the customer,'' he said. ''We price our merchandise 20 to 60 percent lower than regular department stores. We do that as a result of low operating costs and low occupancy costs.''

Ross saves money in several ways. Overhead is fairly low because the stores do not use extravagant fixtures or displays. Advertising expenses are kept to a minimum. Most of the stores -- including the four in the Orlando area -- are in strip shopping centers rather than more expensive regional malls.

On the other side of ledger, Ross pulls in hefty sales. Sales have grown with the number of stores, from $15 million in 1982 to $210.5 million in the company's latest fiscal year.

Ross may be an anomaly. Its sales and profits have been rising while the off-price retail business has been in a stall that is expected to continue through the rest of the decade. Although the industry's annual sales continue to go up, the rate at which they are rising has begun to slow.